Senators Collins, Cassidy pitch state-based ACA replacement plan

Republican Sens. Susan Collins, R-Maine, and Bill Cassidy, R-Louisiana, unveiled their proposal for a replacement to the Affordable Care Act on Monday.

Dubbed the Patient Freedom Act of 2017, the bill gives more power and choice to the states by allowing them to keep Affordable Care Act coverage or to switch to a default option involving a health savings account plan, Collins and Cassidy said.

"Republicans think that power's best held at the state level, not by Washington D.C., so it's not for us to dictate," Cassidy said. "If they like the Affordable Care Act, they can keep the Affordable Care Act," Collins said. "If they want to go an alternative route that is more patient centered, that would provide more choices and help to restrain costs, they could do that too and the federal government would bundle the funding that would otherwise be used for the ACA subsidies and expansion of Medicaid in their state and allow them to proceed along a more creative route."

The Congressional Budget Office has not yet figured the cost of their plan, they said.

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The default option in the bill would allow states to cover the uninsured population by providing a standard plan that has a high deductible and offers basic pharmaceutical coverage and preventative care, financed through health savings accounts.

The amount of money that would go to states that choose this option would be the same as the amount of money they now receive under the ACA, plus whatever funding they would go towards Medicaid expansion.

Under the state alternative option, health savings accounts are pre-funded using an advanceable tax credit, so when a consumer visits his or her provider, the money is already in the HSA account to pay for care, they said. The bill includes catastrophic coverage, so consumers are not made medically bankrupt, a pharmacy benefit, and coverage for preventative care such as vaccinations.

The bill promotes price transparency so consumers can make decisions knowing in advance the cost of their care, and the least expensive option.

Individuals could buy more generous health insurance coverage through HSAs, they said, and employers could contribute to the health savings accounts.

More people would be enrolled in this plan than in the ACA, which would help lowers premiums by 20 percent, they said.

[Also: House advances ACA repeal in budget resolution]

States are scheduled to make a choice by 2018, with plans in place by 2020, Cassidy said. GOP reform measures in the past have been met with a veto threat, Collins said.

"Some of my colleagues have argued for immediate repeal without any replacement, an option that I reject for it risks leaving millions of vulnerable Americans without affordable health insurance and would undo important consumer protections provided by current law," Collins said in a statement. "Others have proposed repeal with the delayed effective date of two or three years to allow time for the Senate to devise legislation that would provide a better approach to health insurance. My concern with the repeal and delay plan is that the Obamacare exchanges, already on very shaky financial grounds, would go into a death spiral as consumers would face uncertainty and insurers would have no basis for pricing their policies."

Of 23 ACA co-ops set up by the government for consumers to buy Obamacare coverage, only five are left, according to Collins.

Insurers have left the ACA market in numerous states, citing financial losses.

Congress has a reconciliation tool in place to financially gut former President Barack Obama's signature healthcare law in a simple majority vote of a budget resolution.

On Friday, President Trump signed an executive order that signals his promise to repeal Obamacare and sets in place a policy not to enforce the individual and employer mandate to buy insurance.

Open enrollment is ongoing through the end of January.

Twitter: @SusanJMorse